Amazon's (AMZN) 'Social' Holding Might Hint at More Upside for Groupon (GRPN)

July 27, 2012 2:46 PM EDT
Uh oh for Groupon?

According to a filing with the U.S. Securities and Exchange Commission, Amazon (Nasdaq: AMZN) is taking down the value of LivingSocial following the unit's latest quarterly results.

Amazon -- which holds a 29 percent stake in LivingSocial -- reported the company swung from net income of $156 million in the prior quarter to a loss of $93 million in the second quarter. Amazon said the book value on its LivingSocial holdings fell from $298 million in the prior quarter to $271 million.

Using the value Amazon gave to extrapolate, LivingSocial's total book value fell $93 million (not a coincidence, we're sure) from $1.028 billion in the first quarter to about $935 million in the last quarter.

Despite the drop in value, revenue at LivingSocial improved 26 percent from $110 million the first quarter to $138 million. By comparison, LivingSocial reported $245 million in revs for all of 2011, leading to a total net loss of $558 million.

While lower book value is never a positive thing, the news might be good for Groupon (Nasdaq: GRPN), as it shows "social discounts" still have some muster behind them. As for LivingSocial, not much was given in terms of color on the quarter -- just a few simple lines of numbers -- so more analysis can't yet be made.

Groupon shares are up 9 percent on the session, possibly on the news. The company is expected to report second-quarter results on August 13th, with the Street looking for EPS of 3 cents on revs of $576.8 million.

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